Using surplus budget for tax credits is debated

February 7, 2013

DES MOINES - A Republican proposal to use Iowa's budget surplus for tax credits drew criticism Wednesday from Democrats, who argued that the money should go to programs or services.

A House subcommittee discussed Republican-sponsored legislation that would use the state's surplus funds to provide credits to taxpayers. Rep. Peter Cownie, R-West Des Moines, said that individual taxpayers would get income tax credits of up to $369. He said the plan would cost over $500 million and called it the best way to deal with the state's roughly $800 million surplus.

But Democrats and advocates questioned whether this was the best use of state funds, saying it would be better to spend on services and infrastructure.

"I could identify a number of one-time expenses, like construction projects, that really would address some very critical infrastructure needs. I just think that's a much better use of those dollars," said Rep. Sally Stutsman, D-Hills.

A long list of Republican lawmakers sponsored this legislation. One co-sponsor, Rep. Ralph Watts, R-Adel, said this proposal keeps the state on a conservative fiscal path, which has been a priority for Republicans. He said he didn't view the plan as a political gesture to appeal to voters.

"We ought to give the money back," Watts said. "If people call that political, so be it."

The bill received approval at the subcommittee level in the Republican-controlled House. It will now go to the full committee for deliberation. It's unclear if the legislation could win approval in the Democratic-controlled Senate.